Payments to foreign contractors

[ek888199]

I need to make a payment to a foreign contractor who provided services to me (self-employed). 

1. Do I need to issue any form to this foreign contractor? (Job performed outside of Canada, a contractor is not a resident of Canada)

2. Is there a limit for payment to foreign contractors?

3. Can I pay in cash or via payPal? 

[TurboImpotLiseD]

If you are self-employed, and have a business registered in Canada, you can input contract work in expenses. 

1. Please contact CRA to verify because if the foreign country has a tax agreement with Canada, you  ight have to provide a T4A

2. Payment agreement depends on the verbal or written contract you have with the foreign worker. A written contract is always preferable. 

3. As a business owner (self-employed) it not advisable to pay cash unless you get a thorough receipt with name, address, work done, etc.... 

This is a complicated issue and you should verify with Canada Revenue Agency to insure a complete and appropriate return. Here are 2 links to help you:

CRA Business expenses

How to complete a T2125 Statement of Business

CRA Business Enquiries line at: 1-800-959-5525

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